There are two ways to do business with manufacturing. The most traditional method is to come up with the capital, invest in the equipment for production, and then to produce, recovering costs over time by being profitable. The second, more modern approach is to outsource the capital equipment needed, relying on others to run their machines for the production, and put more effort on sales and income generation. While small businesses and even medium-sized companies can leverage outsourcing to be nimble, there comes a time when growth requires investment. And that’s when capital equipment for packaging becomes a necessity. However, even with the equipment in hand, wear and tear as well as demand cause changes, and those trigger revisiting the need for equipment again. Here are some of the more common situations that typically drive a new acquisition all over again.
Captain, the Repair Team Can’t Take It Anymore!
There comes a point with any equipment that, no matter how much maintenance is provided, it’s not worth the trouble anymore. When the maintenance costs have reached a point where it just doesn’t make sense, a replacement becomes justified. Most companies use some type of a threshold analysis to determine this cost point and when continued maintenance expenses go into the red versus value obtained. However, what really pushes things over the edge usually tends to be the cost of part replacement. As things get older, less and less supply is available for specific repairs. As scarcity kicks in, the cost of those parts and their labor go up. It literally becomes irresponsible to try and keep old equipment running after a certain point.
Production is Clogging at the Specific Machine
In an ideal system, packaging and production run smoothly. As soon as units arrive at the intake, the packaging system efficiently takes them in and produces ready goods for shipping. There’s no downtime, no delay, and no lack of capacity. However, in poorly running systems, the old packaging machinery becomes the bottleneck, holding up production capacity waiting for the machine to do its job. When that happens, it costs both money to keep running, as mentioned above, as well as lost income opportunity because of all the production that is being delayed instead of getting to market timely. In short, the entire assembly line efficiency is wasted because the packaging at the tail end is taking too darn long to finish.
The Packaging Produced is Poor Quality
A telltale sign of the packaging process beginning to fail tends to be the number of returns coming back for failed protection. Whether the contents are damaged, or the packaging has fallen part, neither are acceptable. Torn up or failing packaging tends to cause products to stay on the shelves and not sell; customers sense the potential of damaged goods and avoid those units. Obviously, when the contents are damaged, people want their money’s worth, and those units come back with returns, the bad packaging clearly being the fault on inspection. Again, both are red flag signs of the current packaging system failing, costing the company more and more in terms of lost sales or replacement costs for additional units made without new income to pay for them.
The Machinery is Being Outpaced by Demand
Along with becoming a bottleneck, packaging machinery can also be made obsolete on the other end by the pull of demand. When even the best, most optimum production from an old machine is not enough, that tool is a flag to pay attention to. A machine that can’t keep up with increasing demand ends up costing a company its income opportunity. The market won’t wait; if it can’t find what it wants, the customer tends to move on quickly and find a substitute. So, production has to be able to not only increase but maintain that higher level of packaging production as well. Newer machines can do this, but the old machines really show their limitations and start to fall by the wayside with increased wear, repairs and missed order deadlines.
The Packaging Has Become a Risk
Back in the old days, bread loaves were wrapped in plastic and then secured with wire. A lot of folks end up sticking their finger with that wire, but it stayed for a number of decades. Then came square plastic securing tabs. Those avoided finger jabs, but little kids had a bad habit of trying to eat them. Now, bread is secured with sticky tape that reseals. Gone are the wire and plastic tabs. It’s a perfect example of how packaging becomes a safety hazard as time goes by. When a company’s packaging choice becomes a problem, that means the packaging has to change. And, no surprise, the machinery that handles the same has to change as well. There are few alternative ways around it; the cost of injury starts to add up, and liability risk for product issues can become very expensive in court very quickly. So, along with packaging changes, the machinery used has to be swapped out as well.
Klippenstein Corporation has been a key player in helping manufacturers and producers adjust to new demands and market changes with their packaging equipment, case erector machines, case sealers, and much more. Instead of fighting a losing battle with old equipment that can’t perform any longer for a variety of reasons, Klippenstein can be instrumental in finding a new path forward.
